LATHRUP VILLAGE, Mich. (1/6/15)--Michael Poulos, president/CEO of $695 million-asset Michigan First CU, Lathrup Village, Mich., offered consumers advice on making smart lending decisions in a recent U.S. News and World Report article.
The article, "6 Mistakes Consumers Make When Taking Out Loans," warned consumers about some of the pitfalls of consumer lending.
Taking out a loan for someone else is one of those mistakes, Poulos said. Co-signing is a mistake, but some people double that error by taking out a loan and giving the money to someone else. Poulos said his staff has encountered cases in which parents borrow money for their children or members take out loans to bail a family member out of jail.
One man had financed a loan to buy his girlfriend her own set of wheels. Sounds like a nice gesture. "But then his wife found out about the car," Poulos said.
Letting emotions fuel borrowing desires is another common mistake, Poulos offered. "People will find themselves in a crisis, or they'll become passionate about something, and they'll want a loan to fix everything," Poulos told U.S. News and World Report. "We've had [members] take out a $1,000 loan so they can hire a limo and get a hotel room for a date, not thinking about the fact that they'll be paying for this amazing night for the next 12 months."
Other lending mistakes identified in the article include: